WASHINGTON - (06/14/05) -- NCUA Chairman JoAnn Johnson followedup on criticisms lodged by members of Congress last week with aletter to a key lawmaker asking Congress to require that a creditunion's net worth be distributed to members afterconversion--similar to what is required in the demutualization ofinsurance companies. Johnson urged that lawmakers, who werecritical of the agency's efforts to invalidate the ongoingconversions at Community CU and OmniAmerican CU, note the vastfinancial benefits top managers and directors have earned afterconverting their credit unions, first to mutual savings bank, thento stock form. "If Congress further restricts NCUA's alreadylimited authority over these conversion votes, the only disclosuresmembers receive, when asked to support a structural change that mayresult in the loss of their ownership of the institution's capital,will be disclosures from the individuals who stand to benefitmost," said Johnson in a letter to Rep. Spencer Bachus, chairman ofthe House Financial Services subcommittee on FinancialInstitutions. A conversion to a mutual savings bank, then stockform, by a credit union with $50 million in member capital, couldresult in free stock grants of more than $10 million over fiveyears for the CEO, and an additional $10 million of free stock tobe shared by the directors, according to Johnson. NCUA's action toinvalidate the conversion votes at the two Texas credit uniongiants came under fire during Johnson's testimony on regulatoryrelief before the subcommittee last week, with one lawmaker callingthe actions "re-freaking-diculous".
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At a time of mild or nonexistent loan growth, middle-market borrowers in the Lone Star State are providing a boost to Fifth Third Bancorp and Huntington Bancshares.
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New details have emerged about the negotiations that culminated in Capital One's blockbuster $35 billion agreement to acquire Discover. At one point last December, the two parties broke off discussions, according to a securities filing.
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Truist Financial's top executive leadership team announces departures; First Horizon's chief credit officer is retiring; Ferry teams with Highnote to roll out a new Visa-branded payroll card; and more in the weekly banking news roundup.
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